Haiti: Generosity reduced by three percent

On January 14th The Huffington Post reported that donations made by generous Americans using credit cards to charitable organizations assisting with relief efforts in Haiti were being “skimmed” by credit card companies by three percent.

The Huffington Post said that for every dollar donated about three percent was kept by banks and credit card companies in the form of transaction fees. It was additionally reported that these companies traditionally keep about $250 million from charitable donations annually.

Who knew that profiting from the generosity of others could be so bloody lucrative?

Then, on January 16th, I heard about the issue from MoveOn.org in an email:

But when Americans donate to charity with their credit cards, the credit card companies get rich. In some cases they keep 3% of the donation as a “transaction fee,” even though that’s far more than it costs them to process the donation.

Now the New York Times is reporting that “some” fees are being waived:

After being criticized for siphoning off up to 3 percent of charitable donations for transaction fees, the nation’s largest payment networks — Visa, MasterCard, American Express and Discover — announced that they would waive fees for some contributions aimed at aiding Haiti in the wake of a devastating earthquake.

The New York Times reported that these transaction fees typically range from 1 to 3 percent.

The Huffington Post also reported that only one time before did the credit card companies waive these transaction fees and that was for the tsunami disaster of 2004.

The rest of the time it is apparently business as usual which means profiting from charitable donations.

So the credit card companies said they’ll waive some fees. Who will do what? Let’s find out (per the New York Times):

  • Visa – “would not apply interchange fees, through February, to donations made to a select group of major charities — the names of which were still being compiled — that are providing support to Haitian relief efforts. The company said it would also donate any revenue that was generated by charitable donations related to the Haiti crisis through next month.”
  • Mastercard – “would wave interchange fees on relief donations made using United States-issued MasterCards to the American Red Cross, AmeriCares, Unicef, Save the Children and CARE U.S.A.” The article did not indicate a time frame for this.
  • American Express – “through the end of February, it would rebate the transaction fees for charitable contributions made on its card directly to the nonprofit organizations listed on the Agency for International Development’s Web site in support of Haiti relief.”
  • Discover – “said it was also waiving some fees but did not immediately offer details.”

Wow. What commitment. If that doesn’t warm the cockles of your heart I don’t know what will. Apparently if you contribute to charity outside the bounds of these very narrowly defined exceptions they will still happily gobble up those transaction fee profits. Additionally they appear to be building in time limits on how long they are willing to do this, like a whopping month or two. I guess they figure they’ll do what looks good now in the moment when the public’s eye is focused on them and then go back to normal once this all blows over. It’s true the memory of the American people can be short.

Meanwhile, I’ve lost all “interest” in credit card companies. I already boycott them for financial reasons. Now I have extra incentive. Thanks, evil scum.

7 responses

  1. I’m adding this to the list of things that dishearten me. Lately it’s quite long. I’m about to stop reading the news.


  2. That is pretty darn awful. Making a profit from human misery.. sometimes it seems that tragedy brings out the worst in people, but I do still believe that overall, there is a lot more good, than bad out there. It just doesn’t make the headlines…


  3. I think knowledge is power. I always knew credit card companies took their cut, but I never considered the donation angle. As someone who has put himself out on the Relay For Life track a few times, this was a little disheartening. But armed with knowledge I have the power to change and adapt as I see fit. That puts the power back on me!

    For example, if I want to donate to Haiti relief efforts, I won’t do it with a credit card. I’ll find a way to send a check directly to the charitable organization of my choice. Score one for the good guys!

    I agree, Teri. There is a lot of good news out there. Most goes underreported, I’ll bet. Happy doesn’t sell. That’s why “if it bleeds it leads” in the world of journalism. We are a society of lookie-loos.


  4. I hesitate to write what I’m going to write, because it may make me sound like a heartless asshole, but it’s reasons like these that I often don’t contribute money when a humanitarian disaster occurs. I’m never convinced the money — all or any of it — is getting to the place it needs to be to serve the people who need to be served. I think about how much money was donated during Katrina and how fucked up that situation became, and that was something that happened in our own country. To say that I trust my money is going toward its intended use in Haiti would just be an utter lie on my part. So, the thing I struggle with most is, how do I help these people who are suffering and dying in a way that will truly help them? I would love some suggestions.


  5. I don’t think it makes you sound heartless at all. You are concerned that your generosity goes to the people in need and not some evil fraudster. That is responsible giving at its finest, in my humble opinion. The point you raise is something I’ve been thinking about a lot lately. I plan a follow-up blog post about it soon.


  6. Wow. Just when I thought credit card companies could be more slimey. It frazzles me that people try to make profit off such a horrific incident.


  7. […] I also recently learned how the credit card companies greedily get their cut of the action. […]


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